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Finance management


Fred Salles

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Hello everyone. 

 

I invested quite a lot in new gear last year (SD888, Wisycom wireless, more Schoeps mikes, etc...),

but,

My first big invoice with this new gear, a full kit for a feature shot in October 2022 still has not been paid by the coproducer that employed me.

This french production company, for which I did quite a bunch of gigs in the past so i trusted them, got bankrupt just as we came back from the shoot. They paid all salaries but, as often in that situation in France, the suppliers come last of the Lasts... Not sure if that invoice will ever be paid.

It is the first time that ever happened to me and it had to occur when I am the one renting out the full gear. I have rented out my gear for documentaries for decades but feature films full gear was outsourced from rental companies till now.

 

Appart for the financial and morale blows, I am wondering what I should have done to prevent this situation or make it less painful.

Shall I  ask for advanced paiement before the shoot from now on?

Can you share about how you manage your finances regarding gear? Do you make sure that you save a « float » amount when you invest in case of unexpected drawback?

 

Thanks

 

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47 minutes ago, BAB414 said:

Did you have a rental agreement with the producers? Something in writing?

Yes, an equivalent to a signed purchase order, but that does not really change a thing in a context of bankruptcy. The french system forces priorities legally: whenever there’s money available first the salaries are paid, then all the taxes and social system contributions (and there is a long list). The suppliers come last. 

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I feel your pain. We have to account for deadbeat producers. 

 

When the production requires that I rent additional gear (CL-12, more comteks, more wireless) I  negotiate a rental contract with the rental house and give that contract invoice to the UPM so THEY sign the contract and pay the invoice for that gear at or before the time of pickup. 

 

Expendables that I buy for the production are reimbursed before we begin shooting or I have them buy them. 

 

I require labor payment each week. I live in a state where we had some of the best film tax incentives in North America until out of state producers took advantage of us, over charged for rental, offered defired labor payments at twice normal rate which they never followed through with and stole taxpayer money. The program was shut down due to mismanagement/incompetence. 

This also reminds me of some producers asking PAs to pay for craft service items with their own credit card! Be red flag. Always, only use a production company credit card. I have mentioned this to more than a couple newbies. 

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Thanks,

Production bankruptcy it is actually more complex than deadbeat producers. 

A production company not paying an invoice can be sued and forced to pay by law. Whereas in case of bankruptcy there is no more company to sue, and it is the french officials that manages whatever money is left in the account of the company. In case of embezzlement the CEO can be sent to jail but that does not mean the suppliers will see their money, at least not before decades! Besides, in my case as in many, they did not do anything dishonest, circonstances and « deadbeat » debtors pushed them out, to make it simple... Covid19 has and continues to do serious damage to independent film producers.

 

 

12 minutes ago, PMC said:

... so THEY sign the contract and pay the invoice for that gear at or before the time of pickup. 

 

Do you require the same for your own gear? (Invoice to be paid at or before pick up)

For production companies that they know rental companies here usually ask for end of the month payment or payment on invoice issued after the shoot (possibly charging in case gear got missing or broken). So it is difficult for us technicians to ask producers to pay upfront or on pick up. But I have not tried yet and will probably always do from now on.

 

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Non payment of invoices is a terrible blow to all of us. To help lessen the blow I will insist that all expendables like batteries, tape, cards, wireless straps/belts and so on be paid for upfront. Or at least half upfront and the other half part way through the production. In the past I have also asked for equipment rentals to be paid the same way, although this seldom works with the larger companies. I have also told a production that wasn't paying the vendors on time (G&E, Camera etc) that the rental company ( yes I don't own equipment, my company does) will repossess the equipment if they don't get paid. I would be there to mix (I'm on timecard) but the gear wouldn't. That ended up with us being paid the following Friday. I have been lucky in that I have only been stiffed once by a customer. I feel  your pain, but would look for the silver lining in that you now have an upgraded package that will pay for itself in the long run. Maybe you'll see something from this job after all the other investors but I doubt it. In future, maybe try asking upfront for a draw, the worst that can happen is they say no.

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This isn't going to help with this prior situation but going forward, I'd try to reconcile bills on a weekly basis.  I've always asked for Labor + Gear Invoice to be paid in full weekly so that even if something were to happen / production go shutdown etc, at least I would only lose out on a week's gear vs months.

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I'm not familiar with French financial law but from what the OP wrote it sounds similar to that of the USA.  Which unfortunately means that as a small creditor you are, as you say, the last of the last in the payment line and will likely not see any money.  Does the French tax system allow for writing off bad debts?  Is it possible and are you willing to confront these people in person?  I've had several nonpayments over the years, the former tactic never panned out for me but the latter one got me at least a little money a few times...

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On 2/27/2023 at 9:09 PM, Philip Perkins said:

 Does the French tax system allow for writing off bad debts?  Is it possible and are you willing to confront these people in person?  

I am not sure I understood you correctly. I am not aware yet about what the french tax system could do in my situation, except hopefully not demanding that I pay them VAT on a payement I did not receive. 

My company managing the gear is only subjected to VAT, no other taxes as it does not reach the minimum “income” to get taxable.

Do you mean confronting the producer in person? you mean asking him to pay from his own pocket? I surely pressure him every month to get update but did not tackled it that way. Not sure about that.

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9 hours ago, Fred Salles said:

I am not sure I understood you correctly. I am not aware yet about what the french tax system could do in my situation, except hopefully not demanding that I pay them VAT on a payement I did not receive. 

My company managing the gear is only subjected to VAT, no other taxes as it does not reach the minimum “income” to get taxable.

Do you mean confronting the producer in person? you mean asking him to pay from his own pocket? I surely pressure him every month to get update but did not tackled it that way. Not sure about that.

Yes I mean confronting whoever is responsible for promising to pay you, in person.  It's really unpleasant, but it at least demonstrates to them that you are serious.  You can bet that corporations they owe money to will be sending their debt to collection agencies if they don't get paid, and those agencies can be very confrontational.  Squeaky wheel gets the grease.

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This won’t help now, but i also invoice weekly on long form projects. Even on net 30 terms it limits the liability to 4 or 5 weeks and allows you to escalate your collection efforts while you still have leverage during production if you feel the powers above are not acting in good faith. 
+1 to @Philip Perkinssuggestion to look into writing off bad debts if French law allows it.  It won’t get you paid, but could reduce or eliminate your tax burden on income taxes, which in effect recoups at least a piece of the invoice. Fortunately I’ve only ever had to do that once for a small amount. 

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  • 4 weeks later...
On 2/27/2023 at 10:00 AM, Fred Salles said:

Thanks,

Production bankruptcy it is actually more complex than deadbeat producers. 

A production company not paying an invoice can be sued and forced to pay by law. Whereas in case of bankruptcy there is no more company to sue, and it is the french officials that manages whatever money is left in the account of the company. In case of embezzlement the CEO can be sent to jail but that does not mean the suppliers will see their money, at least not before decades! Besides, in my case as in many, they did not do anything dishonest, circonstances and « deadbeat » debtors pushed them out, to make it simple... Covid19 has and continues to do serious damage to independent film producers.

 

 

 

Do you require the same for your own gear? (Invoice to be paid at or before pick up)

For production companies that they know rental companies here usually ask for end of the month payment or payment on invoice issued after the shoot (possibly charging in case gear got missing or broken). So it is difficult for us technicians to ask producers to pay upfront or on pick up. But I have not tried yet and will probably always do from now on.

 

Payment for gear that I own and use on a job is usually net 30 days or credir card charge at the end of the day. I have a gaffer friend with lots of G, E & L who asks for gear payment up front. Most of the time he gets it. I haven't. 

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